(INDIANAPOLIS) — Senate Republicans’ budget won’t include an increase in Indiana’s cigarette tax.
The House budget raised cigarette taxes 50 cents a pack. Health groups had urged an increase of two-to-four times that to discourage people from smoking. Senate President Pro Tem Rod Bray (R-Martinsville) says the Senate may raise the cigarette tax someday, but not this year. He says the bill needs more work to ensure the tax hike addresses health needs. And Bray says senators are leery of increasing a tax that’s inherently regressive.
Bray had warned weeks ago the House’s 50-cent increase appeared either too big or too small — too big to satisfy opponents, and too small to accomplish the goal of discouraging people from smoking.
Another bill awaiting a vote next week in the Senate creates a grant fund to help address health issues at the local level. Legislators have purposely kept the funding for that proposal separate from the cigarette tax.
If the tax isn’t restored in final budget negotiations, it’ll be the third time in six years the House has passed an increase only to see it hit a wall in the Senate.
Bray says the Senate will go along with the House in including a first-ever tax on e-cigarettes. He says they should be treated the same way as traditional cigarettes. The House version of the budget taxes vaping at 10% of the retail price. Indiana Libertarian Party Chairman Evan McMahon also chairs the Indiana Smoke-Free Alliance, a coalition of vaping businesses. He says the group supports that proposal, calling it appropriate for the industry to bear part of the state’s budget as long as it’s not unreasonably high.
Senate Republicans will unveil their version of a state budget next week, with a final bill expected two weeks after that. The Senate Appropriations Committee’s final budget hearing before rolling out its proposed changes featured testimony from several social service groups who comprise a tiny slice of the state budget, but who are urging senators to increase that slice due to pressure from the pandemic. The Indiana Boys and Girls Clubs say they were open longer than usual to pick up the slack from schools being closed. Indiana food banks and domestic violence shelters say the pandemic made it more difficult to hold their usual fundraisers, while increasing demand for their services.
Kathy Williams with the Indiana Coalition Against Domestic Violence links the pandemic to an increase in the frequency and severity of domestic abuse. She says the isolation of the pandemic both increased stress and made it harder for victims to get out of the house. And she notes the pandemic also saw an increase in alcohol consumption.
Legislators have already committed to an assistance fund for restaurants and hotels, and money for summer school for kids who lost ground when they couldn’t go to school.